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Founded 1936 | Issue 1 - 2018
Members Need to be Aware of Important Changes to Minimum Wage, Sick Leave Laws

Legislative Update ~ January 2018

Representative Jeff Weninger, R-Chandler, has once again agreed to introduce a liquor omnibus bill in 2018. The bill will contain a number of consensus clean-up provisions throughout the liquor code. It also will contain several specific items that have been developed by ALBA, as summarized below.

First, the language will clean up several references to “acts of violence.” The term “acts of violence” is used in several different settings, both as a basic definition, in reference to multiple acts of violence, and in reference to serious acts of violence.

Unfortunately, the descriptions and definitions used in each of these statutory references are not identical. One of the approaches on the subject of acts of violence will be to clean up the language to make it a consistent definition throughout. As it would be defined, an act of violence will mean one of three situations:

  • A riot, fight, altercation or tumultuous conduct in which bodily injuries are sustained by any person and the injuries would be obvious to a reasonable person; or
  • A riot, fight, altercation or tumultuous conduct of sufficient intensity as to require the intervention of a peace officer to restore normal order; or
  • An incident in which a weapon is brandished, displayed or used.

Second, with reference to repeated acts of violence, a current reference includes the elements of disorderly conduct is eliminated. The exposure to a licensee today is that one or more of the elements of the criminal statute “disorderly conduct” could be the basis for a complaint against a liquor licensee within the DLLC. ALBA objected to adding a separate criminal statute in a liquor violation. Because the elements under “disorderly conduct” are for the most part either clearly irrelevant under the liquor code, or are already covered under the definition itself of acts of violence, we have the agreement of the DLLC to make this change. One of the benefits is to eliminate the exposure to a licensee for a patron making a gesture.

Thethird important change in the proposed legislation relates to a defense by a licensee against a charge of an act of violence or a police officer, based on the intervention of a police officer. Today a licensee is in a “catch 22” situation where the licensee calls a police officer to break up a fight, the licensee, by taking that action, has in effect created an “act of violence” situation. In response, we developed language with the department that provides a limited, good faith argument for a licensee to either mitigate a DLLC complaint or to have it dismissed entirely.

That new language will read:  
The hearing officer may consider as a mitigating factor or defense to a complaint against a licensee for a violation of Subsection A, Paragraph 10 or 14 of this section that the licensee acted reasonably, responsibly and as expeditiously as possible by asking for intervention by a peace officer to prevent or break up a riot, fight, altercation or tumultuous conduct.

Fourth, proposed legislation expands somewhat the number of series 7 licenses to be made available for the next four years.  The proposed language alters the formula to allow an additional license for every increase in population of 5,000 or more. It is estimated that this will produce about seven new series sevens in each of the next four years.

Finally, the language makes clarifying changes to the definition and regulation of club licenses. The language attempts to make it clear that open, non-affiliated events at a club licenses are limited to 12 per year. These types of events are membership recruitment events where they are not connected to a member and are not a wedding or other civic event.

ALBA will be working on this legislation for the next several months and will report progress in subsequent ALBA newsletters. If you have any questions, please contact Dave Delos at ALBA.

Respectfully, Don Isaacson


The following important information came from Steve Duffy, Attorney at Law ~ (article by Steve Duffy Law Office, PLC)

Arizona Minimum Wage Increased January 1, 2018  

    The Fair Wages and Healthy Families Act, passed as Proposition 206 at the General Election in 2016, provided for a State Minimum Wage. It also provided that the minimum, now $10.50 per hour, would increase each year. Employers are still allowed a $3 credit for tipped employees, so their minimum is now $7.50 per hour (assuming the tipped employee actually received at least $3 per hour in tips.)

As the proposition has been in effect for over a year now, some additional guidance has been developed, primarily by the Industrial Commission of Arizona, responsible for making rules and enforcing the Act. The Commission has recently updated its website, and its Frequently Asked Questions (FAQs) found at this link: https://www.azica.gov/sites/default/files/media/FREQUENTLY%20ASKED%20QUESTIONS_MasterwTOC%20FINAL%20112217.pdf

The Commission makes the important point that, although the Act exempts certain employers from the Minimum Wage provisions, those exemptions are very narrow, and virtually every employer is subject to the Act. Many ALBA members were confused by the language in the Act and thought they might be exempt. However, it is very unlikely that anyone in Arizona operating a bar, restaurant or other liquor licensee is exempt. As with the rest of the Act, it is important that a member get advice from a competent source as to how the Act applies to them. This article is not designed as legal advice, but only gives general information. Below are a few highlights that may be of interest to ALBA members from the Commission’s opinion as expressed in its FAQs.

Minimum Wage: The Act raised the state minimum wage to $10.50/hr. for 2018.  (It will be $11 for 2019 and $12 for 2020. For 2021 and beyond, it will be changed each January 1 to reflect cost of living changes.) The minimum wage for tipped employees is $3/hr. less than for non-tipped employees; that is, $7.50 for 2018. (The $3 is not adjusted annually or by the cost of living.) If the tipped employee does not in fact make $3 per hour for the work week in tips, the employer must make up the difference so the employee has received, in wages plus tips, at least $10.50 per hour.

Tipped employees are those who “customarily and regularly” receive tips from customers, such as wait staff, bus persons, and bartenders. If an employee has hours as a tipped employee and other hours as a non-tipped employee, for example, doing maintenance or prep work, the tip credit does not apply to those other, non-tipped hours.

In order to claim the tip credit, employers must provide written notice to employees, retain records to show the employee received the appropriate amount, and allow the employee to retain all tips. Tip pooling, sharing and splitting among employees is permitted, in which case the amount actually retained by the employee is counted toward their tip credit.

Paid Sick Leave: The Act also requires all employers to provide employees with "earned paid sick time" for certain medical-related absences. Employees “earn” one hour of sick leave for each 30 hours worked. However, in companies with fewer than 15 employees, an employee cannot use or accrue more than 24 hours of sick leave per year; in companies with 15 or more employees, an employee cannot use or accrue more than 40 hours of sick leave per year. (Employers are free to exceed these numbers at their discretion.)

Unused sick time would carry forward to the following year, subject to the limitations on accrual. Employers may pay employees for unused sick time at the end of the year (any regular 12-month period determined by the employer) and provide the employee with the required amount of sick time for use in the following year. An employee is not entitled to payment for unused sick time upon leaving employment.

Sick leave may be used as it accrues for:

  • an employee’s medical care or mental or physical illness, injury or condition,

  • an employee’s need to care for a family member with a mental or physical illness, injury or condition or a family member who needs medical care,

  • a public health emergency,

  • an absence caused by the abuse of a child or vulnerable adult, domestic violence, sexual violence or stalking.

The Commission is in the process of proposing some rules that would allow some flexibility for those employers that provide equivalent paid time off, that is, some arrangement that would allow for at least as many hours of paid leave to be used for the purposes of the Act.

There are many details to the Minimum Wage and Earned Sick Leave parts of the Act and to the Rules that the Commission has adopted to implement the Act. Each situation must be carefully considered in light of the Act and the Rules. This summary should not be considered legal advice, and any employer with questions about the application of the Act would be well-served to review the Commission’s guidance at the link above and consult with their own legal counsel to determine how the Act impacts their business practices.


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